ICANN’ s Challenges: Seeking Checks and Balances in Internet Governance

A hot potato

With a heated debate on the urgency of the ICANN reform, one cannot help growing sympathetic with the Corporation. Indeed, who nowadays questions major international organizations' credibility, despite all their internal problems and – sometimes- a slow reaction to global challenges Meanwhile, an organization that has already been operating flawlessly over a good decade has not received a due credit.

What’s worse, each and every stakeholder – the US policy makers , national governments, the international business community, the global Internet community, academics –throw criticisms at ICANN for alleged malpractices, such as lack of transparency in decision making and of accountability, closeness from the public and nepotism, abandonment of the ‘bottom-up’ policy development principle, to name a few. More than this, each stakeholder pursues his own interests and interprets the substance of the invectives accordingly. In the light of a possible termination of JPA[1], the debate has become increasingly politicized to allow an effective therapy of the problem.

So, the situation is embarrassing for ICANN  -– it is really hard to play servant of more than two masters and, being a simply technical entity, to find itself in the eye of the political storm.

Talking business.

In light of the above, let’s try to focus on approaches that might help remedy the situation from the corporate governance perspective. To this end it is appropriate to revisit the original institutional roots of ICANN and imagine its current challenges as merely corporate issues. While at the present juncture the classical concept of good corporate governance has been seriously compromised, there is still every reason to believe in its viability, and if applied properly, good corporate governance practices should help the Corporation improve its performance. In assuming so, it would be appropriate to narrow the focus by examining the potential of the ICANN’s system of checks and balances as a cornerstone of good corporate governance.

Building checks….

A unique entity with a global mission, the ICANN is accountable primarily to its three major stakeholders, that is, government, business community, and the Internet community.

By government we do not mean just the US Administration (which should receive its due for seeding billions of dollars into the Internet infrastructure over several decades), as per the JPA, but other national governments, too, that regard the Internet as a common public asset and are keen to keep a close eye on its performance and security. In view of this one might consider transformation of GAC from an advisory body under the ICANN’s auspices into a truly international intergovernmental board tasked to oversee the Corporation’s strategic planning and operations.

For businesses, the major concern is to have the Corporation (that is, the Internet addressing system) up and running and to keep its sustainability and connectivity for the sake of complex global business operations. So, it would be correct to assume the business community are the least concerned to change the status quo; however, their natural desire to manage unnecessary risks may make them favor a sound change, providing reform proposals do not hamper their interests, including, but not limited to IPR, trademarks protection, and competition, among others.

Meanwhile, some analysts assert that to make sure the Internet community has its say in the ICANN’s affairs, its major constituencies - namely, the gTLD community, the ccTLD one, and the community at large - should also keep being entitled to and solidify the right to exercise control over the Corporation’s operations. For both communities the most viable option for exerting their influence upon ICANN is the forming of an effective constituency with an adequate representation and decision making powers.

…and Securing Balances

In a classical corporation, equilibrium should be sought between the authority and the powers exercised by all the parties involved, and ICANN is no exception in this regard.

More specifically, to solidify its ‘supremacy’, the reformed GAC might be granted the right to veto decisions by the ICANN’s executives. This Sword of Damocles will force the Corporation management to abide by proper standards of corporate governance, while in view of the ‘double-edginess’ of this instrument of control, it would, at the same time, make public servants exercise caution for their own sake.

Meanwhile, to secure the ICANN Board’s reasonable degree of independence of the governmental control, why not to consider granting the Internet community with the right to elect the ICANN’s Board by popular vote through the Internet (in a way the general shareholder meeting does in a normal corporation)? This may result in a real competition for the seats and enhance fairness and transparency of the nomination/electoral process.

As well, it is a common knowledge that ICANN trades recognition of ccTLD=s for their voluntary contributions to the Corporation’s budget, which results in a lax, informal relationship between them. The Russian community believes a viable alternative to this arrangement might be a formal contract between ICANN and the national ccTLD. Given the background of similar contractual relations between the Corporation and the generic TLD=s, the model has long proved its robustness. Indeed, once their rights and obligations under such contracts have been strictly defined, including certain safeguards against any moves which may cause significant addressing failures, the parties would enhance their mutual accountability and add to the ICANN’s overall operational transparency. It should be particularly emphasized that national country code domain operators should have the right to embark on either option on the voluntary basis.

At the same time, to counterbalance the (inter)governmental influence, one may contemplate a possibility for granting the gTLD and ccTLD constituencies combined with the right to overcome the aforementioned GAC’s veto by a certain margin, which is critical for striking a right balance of forces between the key actors.

As for the multibillion dollar-worth businesses, they might opt to use either leverage to lobby and safeguard their interests.

So, to align the forces and their respective powers, a possible option might be making the ICANN accountable to a kind of Board of Directors, represented by the national governments, and a general shareholder meeting formed by the global Internet community. This will ensure the much-needed up-bottom and bottom-up oversight over the ICANN’s performance and, accordingly, seriously improve its accountability standards.

From romanticism to practice

This said, the matter is too complex to be fixed overnight. As well, the cluster of the ICANN and its related institutions, and, accordingly, modifications required is too immense to be addressed all at once, while the Internet community is too huge and diverse to easily build consensus over critical issues; and, last but not least, the US administration still has the casting vote when it comes to the Internet and the ICANN in particular.

However, at the present stage it is possible to outline a possible reform framework, even though a debatable one. In our view, major reform avenues thus should be as follows:

• Termination of JPA and completion of privatization of the ICANN ;
• Transformation of the GAC into a real watchdog overseeing the ICANN’s corporate governance practices;
• Transformation of the ICANN into a supranational corporation governed by a special international treaty and run by Internet pros or, at least, its relocation to a neutral country, to ease possible political trans- Atlantic and trans-Pacific tensions,;
• Making sure the good corporate governance practices are observed with and serve as an antidote to potential controversies within and around the ICANN and an instrument of keeping the whole organism intact.

All this should help the ICANN begin to tackle a huge challenge of launching the nextgen domains, including IDNs.

Projecting further, the difference between generic TLD=s and the ccTLD=s should dissipate over time, and new kinds of domains would emerge, for instance, municipal root domains that would not fall under either category, or a very peculiar group of quasi-gTLD domains, which will differ from the ‘national’ TLD=s. That will require yet a greater degree of consensus between the key stakeholders and ICANN and, accordingly, would trigger further modifications of their interaction models, as well as of the Corporation’s principal mission and corporate governance procedures.

In other words, the latter should be improved to meet an objective demand fueled by evolution of the Internet address space and the persistent need for diversity. As well, a continuous rise of new root domains will push national governments to loosen their grip on the domain space area. So, should the Corporation be able to overhaul its corporate governance mechanisms in time, it would find itself far better prepared to successfully run a greater number of root domains.

The transformational process is going to be quite a painful and slow one, nonetheless, and decision makers should exercise patience and caution in reforming the ICANN’s current modus operandi – the Internet is too valuable a global corporate asset to let it fritz out and investments into its development are too huge to afford a fiasco.

[1] This paper had been drafted in mid-September 2009, prior to the termination of JPA